Owning Versus Leasing A Solar Power System: Which Option Is Best For You

A growing number of homeowners across America are experiencing the benefits of generating power from solar. Like any other home improvement, installing solar panels is a big investment. Luckily there are a number of options available that can allow most South Carolinians to take advantage of the savings delivered by solar energy.

Financial Options For Going Solar In South Carolina

The ownership options for going solar are pretty similar to the ones available for getting a new car. Below we explore the 3 most popular scenarios: Cash purchase to own, Finance purchase to own, and Leasing.

2 Main Options For Owning A Solar Power System

Option 1: Pay for your solar power system with cash

Buying your solar power system means you own both the physical system (the panels, the racking, the inverter, etc.) and the power produced by the system. You essentially become a small power company, and you own the solar power plant that is installed on your roof (or in your yard).

As the system owner, you also get to take advantage of the tax credits, rebates, and incentives that are available which can lower the cost by as much as 50%.

As the saying goes, “Cash is king.” Buying a solar power system outright with cash is the lowest cost option for going solar. You will also pay the lowest cost per kWh over time when you own your system. But, in order to get the best deal you must have adequate funds or savings in the bank (or stashed under your mattress).

Option 2: Finance your solar power system over time

If you don’t have the savings (or if you are planning on spending your savings on something else) you can still own a solar power system through financing. When you finance solar you make monthly payments over time equal to the cost of the system + a one-time finance charge + interest.

When you finance your solar power system you can also take advantage of available tax credits, rebates, and incentives. You pick the length of time you want to finance your solar purchase, generally for 5, 10, 15, 20 or more years. The longer period of time you finance, the lower your monthly payment will be, but you will pay more in total interest.  

For many homeowners who do not have the savings but do have good credit, financing is the best option for going solar. Plus, you may be able to take advantage of $0 Down financing arrangements which allow you to own solar and get a 1-month head-start on energy savings before your first finance payment is due.

Leasing A Solar Power System

Leasing a solar panel system is very similar to leasing a car – You are not the owner but you get to take advantage of the benefits of using the product. Under a traditional solar lease, a third party owns the system and rents it to you so that you can benefit from the electricity it produces.

Think of a solar lease as a trade where you rent out your roof space in exchange for electricity. The homeowner agrees to buy the solar power produced by the system, hopefully at a rate that is lower than what they are currently paying. But, be careful to read the fine print and see if this rate gets more expensive over time.

Most leases are 20 year terms, and like a car lease, once your solar lease has finished the owner will typically offer an option for you to buy the system or to renew/extend your payments. If you decide you do not want either of these scenarios, the lease agreement will end and they will remove the solar system from your property (and then you’ll have to buy power from the local utility again).

The biggest trade off with a solar lease is that the leasing company (or their investors) have access to the 30% tax credit the homeowner would be eligible for if he or she owned the system.

Which solar option is best for you?

It really depends on your financial situation and the long-term goals you want to achieve by going solar. A cash purchase will have the lowest total cost, but you’ll need adequate funding or savings. You can also own a solar system by paying for it over time with financing, and the better your credit score is, the better interest rate you will receive from the financial lender. And if you cannot qualify for financing, a lease could be the last option you have to go solar on your home.

Regardless of which option you pursue, here are some key questions to ask before signing an agreement to go solar:

For all solar systems:

  • What is the total cost of the solar system?
  • What is the timeline for this investment?
  • How much do I pay up front, and how much over time, for how long?
  • What is the system size?
  • How much electricity will the system generate each year?
  • Do system output calculations consider actual installation details of the system?
  • Can I expect to save money with this system? If so, how much? Based on what assumptions?
  • Is the installation company licensed and insured?
  • What will the system look like once installed? Will I receive a system design for my review and approval before installation?
  • Will I be required to make any changes to my home (e.g., roofing upgrades)?
  • Are there separate warranties for parts and labor?
  • What do the warranties cover and what are their durations?
  • What type of maintenance or cleaning is required? Are any maintenance services included?
  • Who should I contact if I have a question about the system following the installation?
  • In many states, laws prevent homeowner associations (HOAs) from restricting rights to install a solar system. What are the rules in my state and can you help me work with my HOA?

For solar leases:

  • What is the length of the lease?
  • Who receives solar tax incentives and how are they factored into the cost?
  • Will my payments increase over time? How does the rate of increase compare to the expected/historic utility rate increases?
  • What happens if I wish to end the lease early?
  • Can I purchase the system, either during the agreement or once it ends?
  • What are my options when I sell my home?
  • Am I free to sell my home or do I need the system owner’s permission?
  • Are there fees to transfer the lease agreement to the new homeowner?
  • Do I have to pay off the lease when my home is sold?
  • Who is responsible for repairs and maintenance on the system?

Learn more about solar power in South Carolina

Learn more about solar by viewing solar panel installations near you, reading about available solar rebates & incentives, or contacting Southern Current to schedule a free solar consultation at your home our business.

South Carolina Solar Power Rebates And Incentives

In addition to decreasing solar costs, individuals interested in going solar in South Carolina have the opportunity to take advantage of some remarkable solar rebates and incentives which decrease the overall cost of installing a solar power system.

30% Federal Solar Power Tax Credit

The US federal government offers a tax credit to both home and business owners who install solar power. A tax credit worth 30% of the total system cost and installation is available. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.

25% South Carolina Solar Power Tax Credit

The state of South Carolina offers an additional tax credit for home and business owners who go solar. The South Carolina solar tax credit is worth 25% of the total cost including installation. The maximum incentive for the SC state tax credit is $3,500, or 50% of taxpayer’s tax liability for that taxable year, whichever is less. This credit has no expiration date and any excess credit may be carried forward up to 10 years.

Electric Utility Solar Power Rebates & Incentive Programs

Many utilities in South Carolina offer additional solar rebate programs that provide an extra incentive for going solar. Speak with a Southern Current representative for more details on the specific programs available in your area. Contact Us today!

Charleston, South Carolina Homeowner Discusses Going Solar With Southern Current

The following interview was conducted with Marv N., Southern Current residential solar customer who lives in Charleston, South Carolina. Find out how much money you could be saving on electricity costs by contacting Southern Current today!

Please tell us a little bit about yourself.

My wife and I retired to Charleston from Chicago 10 years ago. I am a retired science teacher and my wife is a retired labor and delivery nurse.

Why did you decide to switch to solar energy?

The cost of electricity from SCE&G is high and climbing, which made going solar an easy decision. In the long run, this solar power system will save me thousands of dollars. The environmental impact of burning fossil fuels was also part of our decision. A clean environment is important to us.

How much did you know about solar energy?

As a science teacher, I knew the basics of how solar energy and solar panels work. I did my research on costs and benefits, so I felt comfortable making the decision.

What kind of system did Southern Current install for your home?

I have a rooftop system consisting of 23 LG 285 watt panels along with 23 Enphase microinverters.

View of the solar powered home in Charleston, SC.

 

Detail of rooftop solar panel installation.

What made you choose Southern Current for your solar installation?

I chose Southern Current after speaking with two other companies. The Southern Current representative was an engineer who could best answer my questions and concerns. The installation was designed while we spoke and I was given a firm price for the system. I was able to make changes to the design to get the system I wanted. Plus Southern Current has an office near my home. They can control the quality of the installation because they use their own employees and not sub-contractors.

What was the process of going solar like?

The entire process was made simple by Southern Current. They applied for all the required permits and filed the necessary paper work with the HOA. The installation went on as planned. The city and electric company inspections were done quickly and the system was turned on about 2 weeks after installation.

What benefits have you seen since the installation?

Overall my power bill for the first year was $200. I expect it to be close to zero the second year as the system is building up credits leading into the hot summer months. My system was turned on at the end of April last year so it didn’t have time to build up enough credits to take it through the summer. This the second year, I should have enough credits to get through the summer with little or no cost.

What would you say to someone who is interested in going solar?

Definitely look into it while government rebates & incentives are available. Every situation is different, but one thing is for sure: Electric rates will go up. The payback period is about 7 years and will be less as electric rates rise. Solar panels are one investment that will pay back dividends for years to come. When you call solar companies for information, I would definitely include Southern Current in the comparisons.

Want to learn more about solar power in South Carolina?

Southern Current is proud to be one of the leading solar companies in South Carolina, with services available throughout the Southeast. Contact us TODAY to schedule a FREE consultation, and find out how much you could be saving with solar!

Talking Solar With Charleston Home + Design

Southern Current recently had the pleasure of talking solar with the folks behind Charleston Home + Design Magazine and Radio. Click play on the audio clip below and listen to Southern Current’s Sheri Porter give some tips and suggestions about going solar on your home.

A Few Takeaways From The Radio Segment

How to get started with solar

The easiest way to get started learning about solar is to Contact Us to schedule a FREE solar evaluation. By using your home’s address, satellite mapping, and recent power bill data, we can easily help you understand the best solar options for your property.

Things to consider

55% of total costs are paid by available solar tax credits & rebates.

A 25 year warranty is offered on the solar panels, and with no moving parts there’s very little maintenance (maybe some rinsing with a water hose if they get covered by pollen).

An installation for the average home typically takes about 2 days from start to finish. Click to view our Solar Portfolio.

As much as 100% electricity offset is achievable with solar, it all depends on the amount of energy used at your home and the number of panels that can be installed on your property.

Save Money with Solar Power

Southern Current offers quality & value with solar solutions across the Southeast. Whether you’re interested in solar for your home, business, or property, we’ve here to help you save money and transition to an energy future where local power needs are served by power stations that produce clean, renewable solar energy. Contact Us to request more information TODAY!

How Do Solar Panels Power A Home At Night Or On Cloudy Days?

You’ve probably wondered what happens to solar panels at night or on cloudy days. In order for PV (Photovoltaic cells) to convert sunlight into electricity, you need to have sunlight. This is why solar panels work best during the summer season! So when solar panels aren’t generating enough electricity, are you still getting your money’s worth?

The great thing about solar is that the power can be switched to be drawn from the power grid at any time – and you can actually use solar power at the same time as the utility if necessary. The solar array system is wired into a home breaker box (electrical panel), which can then provide power to anything connected to the electrical circuit. Being connected to the power meter & the power grid at the same time allows for a “bidirectional” connection.

A bidirectional connection is like a standard electricity meter, except that it’s designed to measure electricity flow in two directions. When you install grid connected solar power system, you need a meter that can tell you not just how much energy you’ve consumed but also how much you’ve fed back into the grid.

Watch this short video on how bidirectional connection works (also known as “Net Metering”): 

If you have a battery bank set up, you’ll be able to access the stored energy when needed. Many customers also like to get backup-batteries in case of emergency situations where power outages occur. Battery back-ups can be used for small scale cases such as residential solar as well as larger projects like commercial or utility-scale. In certain cases, battery back-ups may not even be necessary so it’s important to discuss this with your solar installer.

Even without a battery bank, a solar array will heavily reduce your utility bill. When looking at solar power from a financial perspective, you’ll be considering how much it produces over an entire year, not so much on a particular day. Some utility companies will compensate you at the end of the year for any extra power that you generate from your solar array system. This is one of the benefits of remaining tied to the grid; sharing power can be a win-win for you and your local power producer.

Cloudy Days

As with nighttime hours, the efficiency of a solar power system decreases on cloudy days since less sunlight reaches your solar panels. However, this does not mean that zero power is being produced. On a cloudy day, typical solar panels can produce 10-25% of their rated capacity.

Cloudy locations are still a good match for solar. For example, Portland is known for its bleak and rainy winters, and has cloudier weather than most cities. Yet over the course of a year, Portland gets about as much sunlight as the average U.S. city. The solar panels also benefit from having slightly cooler temperatures on average; because of the electronics inside, solar panels work best when they aren’t too hot. So in a city with extreme heat, solar is actually less efficient. 

Mother nature has her days, and so every solar installation is made to optimize the potential of sunlight when it’s available. Cloudy days will hardly affect the return on investment of solar panels over the course of a year.

To learn more, contact your local solar installers at Southern Current today to request a FEE solar consultation for your property!